Capitalism Versus Cronyism

Tyler Durden's picture

The sad 'this-is-how-politics-works' punchline of this brief animated clip is "those who can afford political influence get the benefits; and those who cannot afford it suffer the consequences" as Professor Matt Zwolinski attempts to balance the question the common claim that 'capitalism exploits the masses for the benefit of the few' - implicitly advocating increased government power - by suggesting (shock, horror) that government power may be more exploitative than free-market capitalism. In just over two minutes, Zwolinski argues that bigger government (thanks to cronyism among other things) makes citizens more vulnerable to exploitation given its power to coerce - intriguing given the recent comments by Obama.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Max Fischer's picture

Post-lapsarian man = no difference between capitalism and cronyism

Debtonation's picture

I went grocery shopping today and noticed that the can of soup that I usually buy has been reduced in volume from 24 oz to 20 oz but the price stayed the same.  Either the food industry is trying to trick people into eating less food so they are not so fat for the same price, or they are trying to trick people into thinking they are getting the same amount for the same price, a.k.a. hidden inflation of 20%.  Probably the second one.

SheepRevolution's picture

If capitalism was to be set free just for one day, I believe  pretty much all banks on Wall Street would collapse.

Racer's picture

a phantasecond would be enough

DoChenRollingBearing's picture

Read what Jim Clifton (CEO of Gallup, the pooling company) say sin his important new book:



MillionDollarBonus_'s picture

Manifesto of the Progressive Revolution:

Part 1 - Personal Responsibility


It has long been the habit of both religious and right wing zealots to advocate ‘personal choice’ and ‘personal responsibility’. The progressive revolution takes a different approach. Instead of focusing on ethical principles that classify a choice as moral or immoral, we recognize that "choices" are in fact a myth. It is a myth that people are able to influence their circumstances by exercising free will, as has been detailed by many top philosophers at Ivy League colleges across America. The ProgrEssive rEvolution adheres to the work of the following ideologies that absolve people from the myth of personal responsibility:

1. Relativism

2. Determinism

3. Marxism

4. Subjectivism

5. Nihilism 


This knowledge frees people to take what they need from the state and to support policies that they know will work, without having to 'take responsibility' for any negative consequences to others that result from their choices. The consequences were simply meant to be, and are predetermined. If you get something from the government, you were destined to get it from the start, so you are not responsible for the effects to the financial well-being of others in the present OR future. This is the first principle of the progressive manifesto. 


nmewn's picture

So O'Barry was right.

We didn't build anything including the government, so we therefore have no responsibility or allegiance to it. The debts are not ours they are the states and no one has any obligation to pay anymore taxes to support it.

"The consequences were simply meant to be, and are predetermined."

I'm starting to like the way you think ;-) 

Precious's picture

Would you rather be ass raped by a carrot or a broomstick?

Spastica Rex's picture

Please clearly describe both the carrot and the broomstick.

Anusocracy's picture

Hilary is riding the broomstick and the carrot is in a pot of boiling soup.

francis_sawyer's picture

So MDB... If I come over to your house tonite... eat all your food, drink all your beer, & fuck your wife in the @55, I was destined to get it from the start (because we should all think of your stuff as collective state property)... I'm responsible for nothing else... I like the way you think too...

Except if you drink cheap beer, eat TV dinners, & your wife is a dog...

Anusocracy's picture

Shoot the wife and kids, burn the house, but don't rape the dog.

Overfed's picture

I don't think he works for DHS.

DoChenRollingBearing's picture

Whoops sorry!  Here is the link to see what is in Clifton's important book:

Caviar Emptor's picture

I think it's time we review our priorities as a nation: banksters are the heroes. 

First off, they go through a lot just trying to keep America growing, working AND playing every single day. 

Second, they are the last true capitalists. They are the rock solid defense against the forces of evil that threaten us 24/7. 

And finally, all of us were never squeaky clean either. Who are we to point a finger of blame in their direction? People who live in glass houses....even foreclosed and underwater ones....shouldn't throw stones. 

I am calling for total and unconditional pardons and amnesty for all in the banking system, to cover their entire careers retro-actively and their golden parachutes plus ten years of earnings and bonuses. Keep in mind that they will get disgusted if we don't agree. 

nmewn's picture

Thats right...the Corzines and Squids and Fiskers and Pat Strykers of the world gotta eat too...who are we to judge them with our immaterial morals and ethics?

We're simply unworthy.

Caviar Emptor's picture

Wow. You're making me weepy. Peace, bro

nmewn's picture

I'm doin my MDB impression...but its starting to fry my brain.

You have to take what is real and reverse it...illogic becomes logic...abnormal becomes normal...sick becomes healthy and so on...going down the rat hole too far will kill you...half way just gives you a buzz ;-)

CloseToTheEdge's picture


The thing about the Golden Straitjackt is, the tighter you wear it, the more gold it produces.

Milton FreeAssFucksForTheRest

Anusocracy's picture

Let's start a collection for a memorial wall with all their names on it.



John_Coltrane's picture

Its interesting that eliminating the FED would achieve exactly this result:  all money center banks would collapse.  The FED is incomptible with free markets as it is a banking cartel designed spefically to protect its members from competition and uses the bailout mechanism to prevent the creative destruction which is the essence of a market/capitalist economy.

Yes_Questions's picture



16.666% loss.

But whose counting?  

Unit pricing counts and I'll tell you this.  Tri-Tip locally at COSTCO has gone from $4.89 to $8.59 a lb. just in the last 24 months or so.

Case of Mexican Coke gone down from $22.39 a case to as low as $17.89 and now back to $18.29.  Same time frame.  Pure Cane Sugar/no change in volume of product.

MexiCoke, Tri Tip bbq...

And, speaking of elbows, the dispensery beats the hookup by 50%. 

Deep Thoughts.








AU5K's picture

Difference is, you can buy a different soup brand.


You cannot fire the bureaucrats.


nmewn's picture

Thats right up there with the most arrogant man in the white house.

"I don't often drink Kool Aid. But when I do, I prefer my own. Stay thirsty my lemmings"

Flakmeister's picture

I swear that woman could suck the chrome off of a trailer hitch....

And enjoy doing it....

centerline's picture

golf ball through 20 feet of garden hose.  lol.

UP Forester's picture

....suck-start a Harley....

Anusocracy's picture

Maintain a perfect vacuum at the Large Hadron Collider.

runlevel's picture

max i cant even stand your icon. your as leftist and clueless as they come. 

Beam Me Up Scotty's picture

Move to North Korea and fuck off. There's your extreme example of crony capitalism.

Solution? Liberty.

Monedas's picture

The Commonwealth of North Korea, Inc.           Monedas       1929        Comedy Jihad All For One And Meatless Won Ton For All

Max Fischer's picture

North Korea is your notion of crony capitalism?

You're dumb.

You'll never have capitalism devoid of cronyism. They're one in the same. I'm not sure if you've been asleep for the past 30 years, but the more regulation that we take away, the "more free" the markets, the worse the cronyism gets.

Beam Me Up Scotty's picture

You think we live in a capitalist society?  You are dumb.  We don't need 250 years of regulation.  We need more freedoms.  In other words Max, butt out of my life.  Its none of your business.

francis_sawyer's picture

the way I see it... the more layers of government regulation that are applied to markets, an equal scale of cronyism evolves...

Go ask your buddy Lev Davidovich Bronshtein (aka 'Trotsky')...

covsire's picture

Equate and berate: The creed of communists and other small minds.

FreedomGuy's picture

Do you understand you just contradicted yourself? If you remove regulation there is no regulator. With no regulator/ruler/power broker there can be no deals or cronyism. If there is no cronyism then markets are free, in fact, forced to compete for the voluntary relationships of the consumer...unlike the involuntary and coercive relationship of the State with its, citizens.

Free markets eliminate cronyism completely.

Ghordius's picture

+1 today it's the day I agree with you for the second time in principle only.

without regulators (which can be more or less corrupt) cartels can happen. I know this is against a lot of what has been written about free markets, but the way I see it it's again a matter of size in the partecipants of a market.

I maintain this depends from the market, the goods or services in question, the tariff and other law environment, the financing structure, etc. etc. etc.

I maintain there is no one market, only many diverse and heterogenous markets. the one for Picasso pictures is fundamentally different from the ones for electricity or socks or fish or drugs

FreedomGuy's picture

To a degree, I agree that cartels can happen. The proper role of government is to prevent coersion of one person or group against another. Cartels really cannot control much without government intervention, power and protection. They can't make you buy a cell phone, the service or shop at least until the recent Supremely Stupid Court decision. Now government might be able to do that by calling it a tax. However, I am speaking in principle.

If a cartel or monopoly develops there are interesting discussions as to whether that is so bad or not. I prefer it to government intervention. I say that if a monopoly which charges excessively high prices it will engender it's own destruction as alternatives are developed or others come into the market to compete.

Additionally, if a monopoly develops it is because of one of two reasons; first, because the State granted favors or protection...a bad reason. Second, because it had the best service and products at the best price and no one could compete any longer, a good reason! What is interesting is that the State creates the first and wants to control the second. The State will be the common problem in both.

Markets are all the same in terms of supply and demand if left alone. They self regulate and self value. Picasso's sell for enormous prices that are voluntary. Medicine/healthcare and weapons sell for enormous prices in markets that are generally involuntary and fixed. One is priced by voluntary trade, the others are priced by government intervention.

I am willing to risk liberty. What I love about being libertarian is that I never have to talk about controlling others or their property. The only thing I care about is the absence of coersion in life and honoring property rights and contracts. You are free to trade, not trade, work, not work, not work hard, invent or not invent, risk or not risk, help or not help. You own yourself...but not me.

Ghordius's picture

again, I agree only in part. you are using what I see as useful approximations out of the libertarian tool box. they are quite good to get people to think, but often lack real world details.

take the illegal drug cartels as example: yes, gov intervention, though it's a negative intervention attempt.

I could argue that historically governments arise from the need to balance the influence of cartels, including the mother of all cartels, the defence and protection racket, best seen when a mobster explains to you that you don't have to worry because you are under his protection.

I know my opinion grates orthodox libertarian worldviews and I'm not challenging the intent of libertarianism, just some details of it's view on markets and human interaction.

i-dog's picture


"I know my opinion grates"

Indeed, it does, Ghordie! It boggles the mind how you could pull this howler as an example of government non-intervention:

"take the illegal drug cartels as example"

The drug "cartels" are "the government"!!!

A. American and British troops guard opium poppy production in Afghanistan, and use miltary transports to get the opium out! The sole reason for the invasion of Afghanistan just 4 weeks after 9-11 at the end of 2001 was to quickly get the poppies back into the ground -- after the Taliban had ripped them all up (causing a 96% reduction of the crop in 2001) in retaliation for American intransigence over oil pipeline royalty shares!!! (Look at the 2001 opium-heroin production in this chart:

B. The CIA runs cocaine from Colombia into the US -- facilitated by the protection of American bases in Columbia. See: “Colombia turning into giant US military base”

C. The CIA was running heroin out of Vietnam and the Golden Triangle during the whole of the Vietnam "War".

D. The Federal Bureau of Alcohol, Tobacco and Firearms has been caught illegally trafficking guns to the Mexican drug barons! The Attorney-General, Eric "Place-" Holder has stonewalled the "Fast-and-Furious" investigations!!

E. It was the CIA that contracted Eli Lilley to create and produce LSD - under government protection!!!

F. Both the British and American governments encouraged the opium traders operating through Hong Kong into China in the 19th century. The reason that Britain took Hong Kong from China in 1841 was to gain a deepwater port on the China coast at the instigation of the opium traffickers!!

Government involvement and protection has been evident for centuries! Without government laws and involvement, there would be NO drug cartels!!

I could mention many other examples, but that'll do for now.

Ghordius's picture

ok, ok, I concede that the drug cartels are due to (putatively negative) government intervention and that the secret services love to prowl there and use them. And yes, I agree with all the above, including the "crown jewel" of the Opium Wars.

mhmm... that part with the poppy production was new to me, got to think about it...

If it helps, I still can't fathom why the majority of the populations of this globe can think that prohibitions are in any way wholesome. I have the most furious arguments about that in my family - all convinced that banning drugs is "the only way" and "for the kiddies".

I should have stuck to the mobster example. Though in my mind a mafia/mob is a form of primitive/proto-government, too. Nevertheless, what do you think about the "Market for defence and safety"?

Yet I keep thinking that this "free-market" without any "help", "reg", "gov" does not function this way. And I keep thinking that it's like describing how people would behave in vacuum.

i-dog's picture


"what do you think about the "Market for defence and safety"?"


This is the easiest one for voluntarists to solve! -- even easier to address than private roads (whether toll roads between communities, or community funded internal roads/streets)!

Competition between private security companies and publicly available ratings of their respective levels of service are all that is required to provide safe homes, neighbourhoods and communities at very low cost.

This already operates in parts of the UK, where private security companies patrol neighbourhoods, check houses for homeowners who are away at work or on vacation, and break up any local gang activity -- at a fraction of the cost of the public security agency (the police) and with levels of service that the police don't even offer, let alone achieve. The simplest -- and totally free! -- expression of this is a "Neighbourhood Watch".

This also already operates with banks, large firms, and oligarchs ... they much prefer to trust an armoured car or building/home security firm than rely on Mr Plod to carry their cash or watch their warehouse!!


This is also very easily solved -- though not while the US military behemoth is stomping all over the world: we first need to break up the US military into smaller units (for example, by the 50 states each taking their share of men and equipment back from the hegemonic clutches of the Feds). I doubt that any ideologue of any stripe (other than a globalist) would suggest keeping the current US military intact and supplied with new equipment!

No nation state will embark on a war unless they perceive the potential gain to exceed the potential cost. In all current nations, the "prize" is the tax collection agency and apparatus, while the only other payoff is the possiblity of being able to extract any natural resources with the cooperation of the "captured" country (no invader wants to try shipping out natural resources while the whole population is actively attempting to stop them).

  • Countries with no tax collection agency (eg. Somalia, Greece, Sicily) will not get invaded because there is no revenue stream payoff. 
  • Countries with no natural resources also miss out on the invasion bonanza...because there are better fish to fry. 
  • Countries that are fully armed (eg. Switzerland during WWII) don't get invaded, because the invader doesn't wish to be the target of snipers from behind every tree and window (Hitler and Mussolini planned it, but didn't have the guts/stupidity to try it). 
  • Countries with nukes, or other WMDs, don't get invaded -- because payback's a bitch. 
  • Countries that form alliances with other strategically important friends don't get invaded -- because blowback's a bitch. 
  • Countries that don't threaten neighbouring thin-skinned dictators don't get invaded, because they may have other neighbouring sympathisers in the event of unprovoked attack (that's why NATO took out Egypt and Tunisia before going after Khadaffi).

See?! There are many options to consider - and more creative minds than mine could come up with many more innovative and non-aggressive (ie. voluntary) solutions. That's what diplomats are [supposed to be] good at!

Does anyone seriously think that Louisianna would invade Texas for access to oil? Or Texas invade Oklahoma for more grazing land? Or France try to invade England, again? (OK, bad example!)

Ghordius's picture

ok, safety is the easiest - and I bristle at it. I have some experience with private security and I trust them even less than a Mexican policemen. nevertheless, I can't find a good argument against it. +1, though I might come back to you!

>>Edit: I've found one. It's "then the rich get more security than the poor". Sure, the rich have more property to guard, but let me make this "socialistic" argument that human dignity requires a basic safety "blanket" for everyone.<<

LOL - usually I'm quite fast at mocking this kind of what I call "bright-eyed wish-well oh-should-we-not-all..." positive view of human nature. I was expecting something I could stick a knife in, for example leaving out alliances or proposing private possession of WMDs. +1

The only thing I can counterask is: how do you keep people from asking "someone ought to do something" in the typical imperialist manner, like "we should embargo them..." or "bomb and invade them..." for the usual reasons like "they started to produce poppies..." or "they stopped the poppies production..." or "they won't let us finish the pipeline..." or "they won't pay back their debt" or "they mistreat their women" or "he attacked our family's allies the Kuwaiti even though the SecDef told him we would not interfere in their debt/oil and oil-price conflict" or whatever? I sympathize with those Japanese that remind us that gunboats were sent for their refusal to open their country to global trade...

This is the question some creative genius should find an answer. Meanwhile, we are stuck in this inperialist global-trade period of history.

LOL, don't get me into England and France! The last good thing that happened to Blighty was Duke William the Bastard! And a small spell under Boney would have done wonders! ;-)

i-dog's picture

LOL ... Ghordie, if you don't think a little more deeply before replying to my posts, I'm going to have to assume that you are simply pulling boilerplates from 'Sockpuppetry101' (Cass Sunstein, 2008, CFR Publishing Inc)!!!

"I trust [private security] even less than a Mexican policemen"

Then seek compensation from the one that broke its contract with you and find another firm. Post your bad experience with them on an internet rating site ... then do some due dilligence before contracting with another firm, by looking up others' experience with other firms on the same site/s. It's how the supermarkets, coffee shops and housing estates do it in sensible parts of the world (like Asia).

BTW, most Western police forces have a similar reputation to your Mexican policemen ... so be careful trotting out that phrase in future debates. ;)

"then the rich get more security than the poor"

This is certainly the case with government-provided policing, and I'm glad you pointed it out! Try taking on police corruption if you are a "little fellow". I've taken them on in the past and succeeded only because my personal connections went way over their heads.

However, with private security, there is competition for customers and transparency of outcomes. Some poor areas could have far better security even than rich areas -- because the costs are visible and word-of-mouth far more prevalent.

For example, in the city where I live, a privately owned inner-city supermarket employs a private security firm to keep drunks and louts out of nearby parks and streets -- so that their customers are able to walk to their cars and apartments without being harassaed or robbed. It works wonderfully (while the government's previous efforts were appalling)!!!

how do you keep people from asking "someone ought to do something"

*Sigh* ... By making them pay...personally! People don't ask such questions if they personally have to pay for it!

Is Texas going to invade Iraq if their starting position is only a few nuke missiles, a citizen militia and alliances with neighbouring states? How are they going to convince other Texans (or Oklahomans!) to part with their wealth to purchase all the ships, planes, arms and uniforms needed to send an expedition to "bring democracy" to Afghani women?

Even if Iran is going to invade Kuwait (which I seriously doubt would happen in the absence of ZATO's political machinations), what freaking business is it of yours, or mine? If Kuwait asked for help, wouldn't all the people of the world who were "outraged" by Iran's aggression voluntarily put up the funds to finance a rescue mission? Bono and Geldof could even organise another concert! BTW, if I were Kuwait, I'd simply tell Iran that a nuke or two onto, or in, Tehran would immediately follow any invasion!

Your thinking on this point is so shallow and 18th century that it's about to evaporate!!

JOYFUL's picture

...shallow and 18th century...

concise & accurate description of our continental correspondents' dementia...

this appears to be a person who worships Boney(>!>?!?) and has so many non-sequitors shoved into a single comment as to have buried common sense and reason together in a shallow grave(along with the previously jettisoned pretense to all dignity!)

  evaporate> ?

perhaps yu mean vaporize... ? The allusion to 'libertarianism' betrays the classic denseness of the continental washed up upon the shores of an unknown land -the world of anti-statism- and mistakes the argument of black flag adherents for the pious dronings of Mt Pelerin style minions of the synarchist scam so beloved to austrians, autocrats, and honorary archdukes such as hisself...I am now convinced that he writes here whilst wearing a gaudy, epaulette-laden uniform of his own design, similar to the kind von Rompuy fantasizes himself to be wearing when sneering down from his podium at the huddled masses of plebians whom he pretends to rule!

Ghordius's picture

I see you have recuperated your spelling powers, congratulations. In regard to the black or red flags, yes, my experience and my sympathies are limited to my continental experience, the anarcho-syndacalists. I had once a chat regarding them with i-dog, though he gave me the impression of being shocked.

In regard to being washed up on unknown shores, yes, I admit this. How do you fare when you have this kind of experience? Or is your worldview already cut and dried?

I have no clue what your point regarding synarchism. If it helps, I have the impression you are mocking i-dog's views, not mine.

i-dog's picture

Ehhh!?! WOOF! Neither Joyous nor I are syndicalists (nor anarcho-syndicalists)!

That's just another form of collectivism created to not only split the ranks of anarchists but to also hijack the true message of anarcho-capitalism (or classical anarchy, not the bastard black-shirted bomb-throwing that the left not only portrays, but in which they also indulge when acting as agents provocateurs during demonstrations in Seattle, Paris, Athens and Madrid).

Boogey men everywhere!!! Be very afraid!!!

Ghordius's picture

i-dog!! WTF??!! please. read. again. slowly. dammit. thanks.